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Business / Green China

China offers solar power tax breaks

(Xinhua) Updated: 2013-09-30 13:17

BEIJING -- China's Ministry of Finance announced on Sunday that it will offer tax breaks to manufacturers of solar power products, in the country's latest effort to encourage the use of the green energy.

From Oct 1, 2013 to Dec 31, 2015, vendors of self-produced power products using solar energy will receive immediate refunds of 50 percent of the value-added taxes, the ministry said in a brief statement.

The move came as China tries to digest the over-supply of photovoltaic products in the domestic market after demand from major export destinations -- the European Union and the United States -- faltered due to trade rows.

China's top economic planner, the National Development and Reform Commission, on Aug. 30 decided to provide a subsidy of 0.42 yuan (7 US cents) per kilowatt-hour to distributed solar power stations.

Despite the support policies, China's bloated photovoltaic industry still faces a grim outlook as many companies are deeply mired in debts.

The country's top 10 solar panel makers have up to 100 billion yuan in debts and the ratio of debt to assets is above 70 percent in general across the industry, according to data from the China Renewable Energy Society.

Even if the domestic market is expanded, China's production overcapacity can not be fully digested and some manufacturers must be eliminated, analysts have pointed out, expecting the industry to see drastic eliminations and accelerated integrations in the coming months.

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